Business Organizations Law Commons^™

Sticky Charters? The Surprisingly Tepid Embrace Of Officer-Protecting Waivers In Delaware, Jens Frankenreiter, Eric L. Talley

Scholarship@WashULaw

This article investigates the reaction to a much-heralded 2022 legal reform in Delaware that permitted a corporation’s charter to exculpate its officers from monetary exposure for breaching their fiduciary duty of care. To isolate reactions to this statutory reform, we make extensive use of generative AI tools to identify and interpret charter amendments that introduce officer-facing waivers. We find a surprisingly tepid rate of uptake among Delaware corporations through the end of the first post-reform year, notwithstanding widespread predictions that corporate entities would quickly storm the exculpation exits once permitted to do so.

Our study makes two contributions to the …

Sex & Startups, Jens Frankenreiter, Talia B. Gillis, Eric L. Talley

Scholarship@WashULaw

Venture capital is widely perceived to have a gender problem. Both founders seeking capital and the investors themselves are overwhelmingly male, fomenting concerns about how—and how fairly—the VC sector distributes its economic gains. Although gender disparities in funding are well documented, we still know little about whether the governance of VC-backed startups similarly manifests gender imbalances. This knowledge gap is critical, since VC investments often carry strings attached, in the form of cash flow and control rights that can vary substantially from deal to deal.

This study unveils a first-of-its-kind dataset that offers detailed insights into the governance of VC-backed …

Profit, Mission, And Protest At Work, Marion Crain

Scholarship@WashULaw

The classic understanding of capitalism maintains that the social responsibility of business is to increase its profits. But in the last decade, many firms have announced commitments to various social justice issues, folding them into corporate mission statements, codes of corporate social responsibility, and branding. Firms engaging in so-called “woke capitalism” signal their virtuous support for progressive social causes favored by both their consumer base and their idealistic young workers. This has become particularly important in a tight labor market: by targeting workers’ values, savvy firms increase recruiting yields, enhance productivity, and reduce training costs as retention rates rise, while …

Mythical Adverse Effect, Naveen Thomas

Faculty Scholarship

No abstract provided.

Climate, Clarity, Controversy: A Constitutional, Statutory, And Policy Analysis Of The Sec’S Proposed Climate Disclosure Rules, Astoneia O. Moss

Emory Business Law Review

The burgeoning ESG movement has heightened investors’ interest in how companies steward the environment in which they operate; manage their human capital; and implement strategies to effectively manage and fulfill the desires of stakeholders. As a result, the SEC has sought to implement a mandatory climate-related disclosure regime to provide investors with public companies’ climate-related data to assist in the investment decision-making process. The proposed climate-related disclosure rule has faced criticism from businesses, politicians, and legal scholars on constitutional, statutory, and policy grounds. This Comment concludes that based on the statutory language of the Securities Act of 1933 and Securities …

The Rise Of Labor Issues As An Antitrust Priority, Richard Dagen, Maryanne Magnier

Emory Business Law Review

No abstract provided.

For The Birds: Trademark And Brand Management Considerations For The Rebranded Digital Town Square, Arielle Levin

Emory Business Law Review

No abstract provided.

Settlement As Construct: Defining And Counting Party Resolution In Federal District Court, Charlotte S. Alexander, Nathan Dahlberg, Anne M. Tucker

Scholarly Works

Most civil cases settle. Yet generating a definitive settlement rate presents complex definitional and empirical problems, both in what should count as a settlement and how to count it. This Essay makes three contributions to better understanding and defining settlement. First, we propose a flexible, empirically informed, operationalizable definition of settlement as party resolution. Second, we exploit a new federal litigation data source to count party resolutions using machine learning models trained on 11 million docket sheet entries. Third, we offer new findings on party resolution frequency and distribution in the federal courts. Settlement is more widely and differently deployed …

Students For Fair Admissions: Affirming Affirmative Action And Shapeshifting Towards Cognitive Diversity?, Steven A. Ramirez

Seattle University Law Review

The Roberts Court holds a well-earned reputation for overturning Supreme Court precedent regardless of the long-standing nature of the case. The Roberts Court knows how to overrule precedent. In Students for Fair Admissions v. Harvard (SFFA), the Court’s majority opinion never intimates that it overrules Grutter v. Bollinger, the Court’s leading opinion permitting race-based affirmative action in college admissions. Instead, the Roberts Court applied Grutter as authoritative to hold certain affirmative action programs entailing racial preferences violative of the Constitution. These programs did not provide an end point, nor did they require assessment, review, periodic expiration, or revision for greater …

Nonprofit Corporations & Politics: The Entity/Coordination Tension, Lloyd Hitoshi Mayer

Journal Articles

Federal tax law treats separate nonprofit corporations as distinct legal entities for almost all purposes, in common with most other areas of law. With respect to political activity, this means that one nonprofit corporation’s lobbying or election related actions are generally not attributed to another nonprofit corporation. This is the case even if the two entities have overlapping or even identical boards of directors. It is also the case even if the two entities collaborate regarding their respective activities and share employees, facilities, outside vendors, and other resources, as long as the entities reasonably allocate the costs for those shared …

Venture Capital And Financial Stability, Ann Lipton

Publications

No abstract provided.

Will The Real Shareholder Primacy Please Stand Up?, Ann Lipton

Publications

No abstract provided.

Every Billionaire Is A Policy Failure, Ann Lipton

Publications

No abstract provided.

Socially Acceptable Securities Fraud, Christine Hurt

Faculty Journal Articles and Book Chapters

What is a lie? Moreover, where is it a lie? Lies are bad. Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 create liability for issuer firms and individuals who make “an untrue statement of a material fact” or omit “a material fact required to be stated therein or necessary to make the statements therein not misleading.” In the ninety years since the passage of the Securities Exchange Act, however, the number of ways in which market participants may publicly disseminate statements that will be consumed by investors has exploded; does 10b-5 really apply to all these …

Corporate Governance Through Social Media, Christina M. Sautter

Faculty Journal Articles and Book Chapters

Retail investors and other stakeholders are vigorously and loudly taking positions regarding corporate governance issues on social media. They are gathering on social media to discuss which stocks to invest in and to debate and collectively act on corporate governance-related matters. Propelled by new technologies and social media, retail investor engagement has shifted away from traditional venues like corporate voting and shareholder proposals. Retail investors have opened tens of millions of new brokerage accounts since 2020. These new retail investors, primarily Millennials and GenZ’ers, are adept at using technology and naturally gather and obtain information on social media. A co-author …

Law’S Detrimental Reliance On Intermediaries, Carla L. Reyes

Faculty Journal Articles and Book Chapters

Emerging technology is law’s magic mirror. Even as law seeks to cabin the effects of emerging technology in society, when we hold emerging technology up to law, emerging technology often reflects flaws or gaps in legal constructs. Of course, rather than recognizing those flaws or gaps, law retorts back “mirror, mirror, on the wall, who is the fairest of them all?,” demanding that all other disciplines and constructs bow before law’s mighty, near-perfect reach. Often, no matter how strongly emerging technology demands that law bend, legal evolution only occurs after regulatory failures harm individuals on a massive scale. One emerging …

The Thrusts And Parries Of Policy Arguments, Scott Hirst

Faculty Scholarship

Anyone who has ever put forward a policy proposal has heard the response, “if it ain’t broke, don’t fix it.” But despite the ubiquity of this attack on policy proposals, there has been little sustained inquiry into how the attack works and how it can be defended. The goal of this Article is to identify policy attacks like this, and to show their underlying logical structure, and how they function to attack policy proposals. The Article demonstrates this approach by considering three generic attacks on policy proposals, which I refer to as ain’t broke attacks, partial framing attacks, and dollar …

Intermediaries And Differentiated Voting, Usha Rodrigues

Scholarly Works

This article explores the implications of differentiated voting—precatory, volitional, veto, and vetting—for institutional intermediaries such as mutual funds and pension funds. Building on the work of Jill Fisch and Jeff Schwartz, the piece argues that fund managers should exercise informed fiduciary judgment rather than rely on pass-through voting, which often proves impractical for retail investors. While precatory proposals on broad governance or ESG issues may allow meaningful shareholder input, director elections, bylaw amendments, mergers, and conflicted transactions require the expertise and discretion of intermediaries. Using Tesla as a case study, the article illustrates how different voting categories operate in …

Fiscal Equity: The Non-Profit Model Of Corporate Ownership, Eric A. San Juan

American University Business Law Review

In an era of excessive executive compensation, the non-profit corporation serves as an exemplary alternative. Voluntarily, some brand-name manufacturers operate under existing law that permits non-profit ownership. Virtually all corporations could become non-profits under a legislative reform potentially more effective than past redistributive measures. Twentieth-century progressive taxation has waned, while initiatives to endow impoverished children with personal accounts have not expanded beyond pilot programs. Instead, economic inequality widens with global industrialization. Traditionally, deprivation led to the call for the abolition of private ownership of the means of production, yet this proved impracticable under revolutionary regimes. A review of the evolution …

Communication Decency Act And The Intellectual Property Exception, Casey Windsor

American University Business Law Review

As the internet proliferated in the 1990s, Congress became concerned with courts impeding the advancement of the internet and the distribution of obscene materials. Congress passed Section 230 of the Communication Decency Act (CDA), which was part of the Telecommunications Act of 1996. Section 230(c), known as the “Good Samaritan” provision, gave broad immunity to interactive computer services providers (ISPs) who monitor third-party content posted to their website.3 Section 230 created the regulatory foundation for modern day ISPs, including social media websites like Facebook.

The Chicken Or The Egg: The Proper Order Of Analysis When Determining The Enforceability Of A Delegation Clause And The Broader Arbitration Agreement In Consumer Contexts, Parker Reynolds

American University Business Law Review

First, this Comment will provide pertinent background on the Federal Arbitration Act (“FAA”) to better understand the intent of the legislation and how it has historically been applied. Second, this Comment will seek to not only explain the underlying cause of the circuit split but also offer a framework for the proper order of analysis in situations with both a delegation claim and an unenforceability claim. Specifically, this Comment will argue that although a delegation clause’s enforceability must be analyzed separately from the entire agreement’s enforceability, the delegation clause must be examined within the context of the arbitration agreement to …

Accidental Corporate Social Norms, David Kwok

American University Business Law Review

Corporations deliberately attempt to shape social norms through advertising, publicity, and political contributions. This paper considers the threat of corporations’ accidental influence on social norms and expectations. When corporations have accidents, we frequently focus on direct harms: an oil platform may catch fire and explode, leading to environmental and human losses. These accidents may also impact social norms, though. If users stay with a dominant social networking firm despite repeated data privacy breaches, for example, people might come to accept a lack of data privacy. Dominant firms may inadvertently facilitate rapid reshaping of societal expectations. Judicial recognition of this threat …

Clothes Captioning: The Demand For A Sustainable Fashion Industry And The European Union’S Push For Digital Product Passports, Grace Baer

American University Business Law Review

First, this Comment will provide background on the demand for transparency on the fashion industry, its response, and the regulatory framework proposed by the EU. Then, Part III will argue that the ESPR and the SSCT fall short of meeting the EU’s objectives because their requirements, as applied to textiles, are too stringent; their enforcement and effect on trade partners too disparate; and the risk of businesses’ intellectual property too high. In Part IV, this Comment will recommend that the EU strengthen its proposals by providing guidance on enforcement, equal treatment of small and medium-sized enterprises (“SMEs”) in the textile …

Rediscovering Adam Smith: An Inquiry In The Rule Of Law, Competition, And The Future Of The Federal Trade Comission, Melissa Holyoak, Christopher G. Mufarrige

American University Business Law Review

It is my privilege to be here to celebrate the 40th anniversary of the Competitive Enterprise Institute (³CEI´), along with the 300th birthday of Adam Smith. For decades, CEI has been at the vanguard of free-market advocacy, and it is wonderful to combine CEI's anniversary with a celebration of Adam Smith. I will start with a standard disclaimer: The views I express today are my own. They do not necessarily represent those of the Federal Trade Commission (FTC or ³Commission´) or any other commissioner.

U.S. Securities And Exchange Commission And The "Deep Administrative State": A Case Study Of Its Esg Rules, Jerry W. Markham

American University Business Law Review

This study examines the highly controversial “environmental, social, and governance” (ESG) rules that were adopted by the Securities and Exchange Commission (SEC) in 2024. Those rules require large public companies to disclose their policies for dealing with climate change and report their greenhouse gas emissions. Critics charge that those rules are the product of a “deep state” administrative agency that is operating outside the checks and balances imposed by the Constitution on other government actors. The study relates the background for these deep state concerns and the constitutional and statutory restraints that were intended to prevent the development of such …

Hollywood's Triple Threat: Writers, Actors, And Antitrust Regulators Take On The Streaming Giants, Remy S. Farkas

American University Business Law Review

In the summer of 2023, Hollywood froze when actors, writers, and crew took to the picket lines. Their gripe: the recent mega mergers by media conglomerates. The Writers Guild Association and Screen Actors Guild American Federation of Television and Radio Artists joined forces to protest recent acquisitions by Disney, Amazon, and Netflix; these companies vertically integrated within the industry, which allowed them to exploit workers, limit content, and raise prices for consumers. In the same summer, the Department of Justice and Federal Trade Commission released Draft Merger Guidelines, which included thirteen new guidelines for evaluating whether a merger violates antitrust …

State Taxing Power Over Tribal Leasing Activity: Balancing Bracker With The Call To Modernize, Caitlyn Lindstrom

American University Business Law Review

Federal law operates on the premise that state jurisdiction does not interfere with American Indian jurisdiction, and it is generally accepted that states may not tax Indian entities or members. However, the Supreme Court held that there are circumstances in which states may extend taxation onto non-Indians residing on tribal lands. In cases where Indians believe that states are violating legislation or regulations prohibiting state taxation, the Court follows the Bracker balancing test, an interest balancing test that weighs state, federal, and tribal interests. As with most balancing tests, this test lacks strict guidance on how to properly weigh certain …

Enforcing International Human Rights Law Against Corporations, Barnali Choudhury

All Papers

International human rights law is generally thought to apply directly to states, not to corporations since the latter is not a subject of international law. Some domestic courts are, however, enforcing these norms against corporations in domestic settings. Canadian courts have, for instance, recognized that corporations can be liable for breach of customary international law norms while UK courts have enforced international human rights norms indirectly against corporations relying on a combination of domestic corporate and tort law.

At the same time, some states are choosing to enforce international human rights norms against corporations using regulatory initiatives. These initiatives, known …

Catalyzing Climate Resilience In The Electric Utility Sector: Investor-Backed Utilities Must Prepare For The Approaching Storm, Jose J. Gonzalez

Emory Business Law Review

Communities and businesses that fail to take proactive measures will be devastated by the impacts of climate change. Across the United States, public and private entities have taken steps to protect companies and communities from climate change. However, financial restrictions and shareholder concerns have slowed such a response from the electric utility sector. This inaction has devastated communities such as Paradise, California and Lahaina, Hawaii. This Comment identifies how electric utility companies should utilize recently passed federal legislation, including the Bipartisan Infrastructure Law and Inflation Reduction Act, to finance large-scale projects to update America's power grid. This Comment also argues …

The End Of Remedies?, Joshua Shapiro

Emory Business Law Review

No abstract provided.